Gambling is killing one Australian a day, but it rakes in billions in tax

By Jason Scott and Michael Heath

UpdatedSeptember 28, 2016 — 10.17amfirst published at 9.18am

After struggling with a gambling addiction for 13 years, Kate Seselja had enough. The 37-year-old mother of six was contemplating driving her car into a tree after losing more than $500,000 playing slot machines.

"At first they were a bit of fun," said Seselja, who sought help after almost joining the estimated 400 Australians with gambling-related problems who commit suicide every year. "It's so normalised... There's machines on just about every street corner."

More than half of the $23 billion that local punters gambled away last year was sunk into slot machines. While most countries restrict gambling to casinos and betting shops, Australia permits it in hotels, sports clubs and RSLs. Accounting for less than 0.5 per cent of the world's population, the nation is home to a fifth of the world's slot machines.

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And there's scant will for political change: the industry is a major donor to lawmakers and the Coalition government, and previous attempts at reform have failed. States and territories reaped $5.8 billion in taxes from gambling in the year through June 2015, easing the pressure on the Turnbull government as it is presiding over a fragile AAA credit rating and a budget hole made worse by political inertia and gridlock.

While the re-election of anti-gambling powerbroker Nick Xenophon to the Senate in July - with a handful of senators from his party in tow - has reignited talk of reform, he's sounding despondent.

"The hoteliers and clubs are powerful lobbyists and the No. 1 jackpot junkies are state governments," said Xenophon, adding that Australian politicians are "terrified" of the gambling industry. "The federal government could wean them off their dependency but it doesn't look like that will happen."

A decades-old habit is hard to shake. Slot machines started proliferating in Australia in the 1950s when they were legalised in NSW. Their evolution from clunky "one-armed bandits" into sophisticated video-game entertainments encouraged other states to adopt them in the early 1990s, as governments sought revenue sources in the wake of a recession.

Social cost

Some 200,000 machines later, pokies are the biggest driver of the nation's gambling industry - but that's come at a cost. About one in six Australians who play regularly has a serious addiction and loses on average about $21,000 a year, according to government data. The social cost of gambling to the community is estimated to be at least $4.7 billion a year.

Australia's gambling addiction has made it the world's biggest loser. The country spent $US761 ($992) per capita last year, with Hong Kong and Finland coming in second and third place, according to UK-based Global Betting and Gaming Consultants. The US, with its casinos mecca Las Vegas, ranked seventh.

Xenophon joined Greens senator Larissa Waters and independent MP Andrew Wilkie on Tuesday to launch a PokieLeaks campaign to encourage workers in pokies clubs and those involved in manufacturing the machines to expose secrets behind what he called "the electronic locusts of the 21st century."

'Un-Australian'

Australia seemed close to enacting new safeguards in 2010, when Wilkie agreed to support the Julia Gillard government in return for stricter rules on slot machines, including allowing a maximum bet of $1.

After a campaign by club lobbyists branding the measures "un-Australian", Gillard tore up the deal. And the election of the Coalition government killed any chance of reform.

The pokies lobby's influence compares to the power wielded by the National Rifle Association in the US, said Tim Costello, Alliance for Gambling Reform spokesman. He said the states and the gaming industry have helped pokies "to spread, particularly through the poorest postcodes, and it's a willful blindness by the federal government to say, 'well, who cares?'"

"There really isn't that clear need for interference from the federal government" because the states license, regulate and collect revenue from the gaming industry in their own jurisdictions, Minister for Human Services Alan Tudge said in an interview. While he would prefer that pokies machines were restricted to casinos, such as in Western Australia state, it was too late to "unscramble that egg."

'Harm minimisation'

"Labor believes that well-regulated gambling has a place in Australian society, as long as appropriate harm minimisation measures are in place," said Julie Collins, the opposition's spokeswoman for gambling. She said Labor was continuing to examine reform proposals.

On the suburban fringes of Canberra, the sprawling gaming and dining facilities of the Vikings Club offer pub grub and alcohol at discount prices, plus a choice of more than 200 poker machines. The group owns four clubs around the city, with 702 machines earning about three-quarters of its revenue.

While Anthony Hill, Vikings chief executive officer, said his clubs may have become too focused on gaming revenue rather than sporting facilities, he dismissed the need for further legislation.

"Most customers are consenting adults happy to be entertained, and are educated enough to know what their odds are," Hill said, adding his club's machines are programmed to cost gamblers an average 8 cents of every dollar played.

Francis Markham, who conducts gambling research at the Australian National University in Canberra, said industry lobbying was slowing the reform movement.

"There's a correlation between a spike in political donations from these groups just when there's more talk about gambling reform," said Markham. "Neither of the major parties are willing to countenance reform, and for the minor ones their drive for change appears politically latent."

Former pokies addict Seselja now gives talks in the clubs where she sometimes lost her monthly salary in a couple of hours.

"We haven't been protected from this obvious, preventable harm by the government," she said. "To market it as harmless fun and entertainment, when it's been totally designed to addict an individual and take all of their money, is obscene."